New deadlines for investment advisors under the Dodd-Frank legislation could be extended into 2012, according to a new letter from the U.S. Securities and Exchange Commission.

The new letter, dated April 8, comes from Robert E. Plaze, associate director for regulation of the Division of Investment Management at the SEC and is addressed to David Massey, deputy securities administrator at the North Carolina Securities Division and president of the North American Securities Administrators Association.

In the letter, Plaze follows up on conversations between the two regulatory organizations regarding two provisions for investment advisors in the landmark Dodd-Frank law, addressing mid-sized advisors and advisors currently under the private advisor exemption. The SEC is scheduled to complete its rulemaking by July 21, but investment advisors’ deadlines may be extended until 2012 for new compliance.

Under Dodd-Frank, mid-sized advisors, those with $25 million to $100 million in assets under management, will have to register with states instead of the SEC. The process will require a re-programming transition that could take until the end of the year, Plaze wrote in the letter. As a result, the SEC will consider requiring its registered advisors to report their eligibility to register in the first quarter of 2012. Advisors having to register with the states and adjust to state laws may have a grace period for that transition, the letter stated.

Dodd-Frank will also require advisors that currently come under the private advisor exemption to now register with the SEC. The SEC will likely issue new rules before July 21, when existing rules are set to expire, the letter said. The deadlines for those advisors, who typically work with hedge funds and other private funds, may have until the first quarter of 2012 to register and become compliant, the letter said.

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